Revenue Recognition Rules determine how revenue will be recognized. Revenue Recognition Rules are the foundation rules of the policy that a company follows. Revenue Recognition Rules are assigned to each Agreement Fee.


The following table describes the three basic rules that Conga supports. 

Revenue Recognition RuleDescription
ImmediateRecognize the entire fee amount immediately. For example, when you buy groceries from a store, revenue is recognized immediately.
Ratable

Recognize the fee amount over a period of time and calculate the deferred balance accordingly. For example, when you subscribe to a video streaming and pay for one year upfront, then revenue will be recognized every month and the deferred balance will decline as revenue is recognized.

Note

This model is useful when there is no end date to the subscribed product or service. The customer pays as per usage.

Subscription

Recognize the fee amount over a period of time but does not track deferred revenue. For example, you subscribe to any online magazine with a monthly payment, revenue will be recognized over a period of twelve months.

Note

This model is useful for monthly subscription models where a customer is free to cancel at any time.


To add a Revenue Recognition Rule to your Agreement Fee, refer to Agreement Fees in Revenue Recognition User Guide.

Note

You can opt to consider or ignore Leap year while calculating revenue from Custom Settings. Go to Setup > Build > Develop > Custom Setting and click Manage for Revenue System Properties. Click Edit for System Properties and select Ignore Leap Year For Revenue Recognition to ignore the leap year for revenue recognition.